Solar CEOs like to complain these days about the lack of capital and the difficulty of getting their companies off the ground.

They should talk to Richard Swanson. As a professor of electrical engineering at Stanford in the 1970s and '80s, he emerged as a leader in solar research. He co-founded SunPower (NDSQ: SPWRA) back in 1985 to capitalize on the growing interest in alternative energy. Still, the company lived from project to project until Cypress Semiconductor invested $150 million in the company starting in 2002.

Now, of course, SunPower is one of the leaders of the industry. It makes the most efficient solar cells (22 percent) on the market. The company also develops solar power plants and signed a 250-megawatt deal with Pacific Gas and Electric earlier this year (see PG&E to Buy 800MW From OptiSolar, SunPower).

Greentech Media caught up with Swanson during an event to dedicate a 185-kilowatt system at the Technology Museum of Innovation in San Jose last week. SunPower developed and oversaw the installation of the project, which features 803 rooftop panels.

Q: What was a big break for SunPower during its early years?

A: Our first big customer was Honda [in 1996] to develop a solar powered racecar. They came to us and say we know you make the most efficient solar cells, can you make them enough to cover a car. It was a tear-shaped car with cells integrated into the body. Very high tech. Very aerodynamic. It could go 90 miles an hour on solar power. They went on to win the race across Australia. In fact they beat the second-place winner by a day.

That put us on the map. Too bad the race was only once every three years. It wasn't very much of a supporting business for SunPower.

Q: But it took many more years to finally find a believer in Cypress?

A: The mainstream solar companies like BP and Shell kind of ignored or dismissed us. They didn't think that SunPower would be anything other than a manufacturer of specialty products. It was expensive when we made them in a small factory in Sunnyvale. It wasn't until we brought the manufacturing know-how of the chip industry that we drove down the cost.

Q: Do you think how BP and Shell thought of SunPower is how most people in the solar industry view thin-film solar technologies, which are largely in the early stages of commercialization?

A: Thin film hasn't quite happened yet. Maybe it can demonstrate that soon. We of course have lots of friends in the thin-film industry, and we watch them closely and root them on.

Q: Is SunPower interested in developing its own thin-film technology or buy a thin-film company?

A: We are interesting in everything. SunPower also is a larger purchaser of solar panels. We buy panels from other companies for developing power plants because we have more demand than supply. We could purchase thin-films for our plants.

Q: What were some technical hurdles to overcome when SunPower first entered the solar market?

A: Back then the market was very much smaller, so the people who were doing this were pioneers. They tried to figure out how to mount panels on the roof, for example. We merged with a company called PowerLight that made a breakthrough in that area. They realized that for a flat commercial roof, you didn't need to bolt panels to the roof. This array here [at the Tech Museum] was installed in three days. It would've taken weeks and weeks to install with the old method.

There have been breakthroughs all across the value chain, starting with refining silicon. The more we do it, the more the price comes down.

Q: The solar industry has taken off quickly in recent years – did you anticipate that?

A: The industry has been growing steadily, so it's not like something happened suddenly. Most people, especially in California, now know about the solar power roof. But even five years ago, we were still getting the question: Where does the hot water come out? People didn't realize it makes electricity.

What we learned from old timers at Cypress is that the solar industry feels just like the chip industry in the '70s. It's growing and anything and happen and it's exciting. But the word "chip" didn't enter the public lexicon until the IBM PC came out. Our IBM PC moment is right upon us for our industry.

Q: A lot of public education is still needed for solar, no?

A: A lot of people who aren't watching the industry have outdated ideas. I've even come across people who said with a straight face that, well, it makes no sense to do this because it takes more energy to make a panel than what the panel will ever produce. That actually came from a Scientific American article in 1970. It was probably true then. But it's not even close today.

Q: Is there a solar industry equivalent of Moore's Law in the chip industry that drives technology advancement while reducing production costs?

A: There is nothing like Moore's Law, which is really about shrinking geometries and getting more transistors onto a wafer. But there is a parallel thing that we are driving costs down on a predicable curve. It's not quite explosive as Moore's Law. The expensive crystalline silicon has been the biggest cost in the panel, and we have been steadily making wafers thinner and thinner to use less silicon.

We use half of the amount of silicon to produce a watt of power than we did five years ago. That's a tremendous progress.

Q:Speaking of silicon, there is a big debate about whether its shortage is over. What do you think?

A: Most observers think they see early signs of the easing of silicon availability. It's still more of drumbeats with your ears to the ground than the actual stampede that is in your face. As more silicon plants come online to drive the prices down, the panel prices also go down. But with the global recession, how much demand will there be for the panels? It's something that's unfolding, so next year will be an interesting time for our industry.

Q: Will the recession slow down solar market growth?

A: We don't know. We haven't seen it in any degree yet. But of course everybody is worried by what you read in the newspapers. We are still at the very early stage and attracting a lot of early adopters. There is a lot of pent up interest in solar.